Shares of Indian Railway Finance Corporation (IRFC) fell sharply on Wednesday after the government announced plans to sell up to a 2% stake in the state-owned railway financier through an Offer for Sale (OFS).
The Centre has offered an initial 1% stake, with an option to sell another 1% if demand remains strong. The floor price has been fixed at ₹91 per share, nearly 8% below the stock’s previous closing price, making the offer attractive for institutional and retail investors.
The proposed divestment is expected to help the government raise more than ₹2,300 crore. The OFS opened for non-retail investors on Wednesday, while retail investors will be able to bid on the following day.
Following the announcement, IRFC shares dropped around 5% during trade as investors reacted to the discounted pricing and the increased supply of shares in the market. Analysts said such stake sales often create short-term pressure on stock prices, although they can improve liquidity and broaden the shareholder base over the long run.
IRFC plays a crucial role in financing Indian Railways’ expansion and infrastructure projects. As the dedicated financing arm of the national transporter, the company raises funds from domestic and international markets to support railway development across the country.
Market experts said investor response to the OFS will be closely monitored, especially given the strong interest in railway and public sector stocks over the past year. While the discounted offer may attract buyers, near-term sentiment could remain cautious until the share sale process is completed.
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